| TO: | Honorable Bill Callegari, Chair, House Committee On Pensions |
| FROM: | Ursula Parks, Director, Legislative Budget Board |
| IN RE: | HB651 by Capriglione (Relating to the number of hours certain employees must work to be eligible to participate in the Texas Municipal Retirement System.), As Introduced |
No significant fiscal implication to units of local government is anticipated.
The bill would allow municipalities participating in the Texas Municipal Retirement System (TMRS) to adopt an ordinance increasing eligibility requirements for employees. Cities passing such an ordinance would raise the minimum hours worked per year from 1,000 to 1,500, and it would apply to all future employees.
Participating municipalities (cities) who passed such ordinances would no longer make contributions to TMRS for these employees. Cities with proportionally larger numbers of part-time employees would not have an increase in their unfunded liabilities, but could have to raise their contribution percentage to pay off these liabilites since the payroll it would apply to would shrink. Reduced contribution amounts are not estimated to be significant in the near or long-term.
Cities that do not participate in Social Security may have to set up a Social Security replacement plan for affected employees, typically a defined contribution plan. The fiscal impact from this is not estimated to be significant across TMRS cities, but could be more significant for a small participating city.
TMRS estimates that they would have additional one-time costs of $17,100, mostly due to additional mailings. These costs are not estimated to be significant for TMRS.
| Source Agencies: |
| LBB Staff: | UP, RB, SD, WM
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